On Balance of Payments Compilation and its Related Issues
Date Issued
2004
Date
2004
Author(s)
Yeh, Rong-Tzaw
DOI
zh-TW
Abstract
The balance of payments is a systematic record of economic transactions between residents of one country and residents of the rest of the world for a given period of time. The Central Bank of China has compiled balance of payments statistics for the Taiwan district since the 1950s. As a member country of the International Monetary Fund (IMF), Taiwan was required to furnish the IMF with balance of payments data in accordance with the Articles of Agreement of the International Monetary Fund (Article VIII, Section 5). Although Taiwan has not been a member country of the IMF since 1979, the Central Bank of China has continued to compile and publish balance of payments. The balance of payments plays an important role in macroeconomic policy and exchange rate determination, as it offers comprehensive information to assess an economy’s financial relations with the rest of the world. In addition, the balance of payments can be used in compiling national income statistics and flow of funds statistics. Long-term disequilibrium in the balance of payments could induce a financial crisis. There are various methods and theories relevant to measuring disequilibrium in the balance of payments and adjustment
mechanisms. Increasing globalization and financial deregulation have lead to an increase in the volume of cross-board capital movements, and global financial products and transactions have accordingly become both more plentiful and sophisticated. Since the balance of payments records international transactions and presents the relationship between one country and the rest of the world, the demand for balance of payments has increased more than ever before. Since the mid 1990s, following a series of international financial crises, many international financial organizations and central banks have been intensively investigating the signs and indicators pertinent to a deterioration in the global financial situation. Due to the complexity of the global financial system, there is no single indicator that can be used to gauge whether a financial system is stable. Instead there is an extensive range of concepts that need to be taken into account to get a general picture of the soundness of a financial system. To prevent a recurrence of financial crises, international financial organizations have been actively working on strengthening international financial statistics. For instance, the World Bank has strengthened the compilation of External Debt Statistics and the Bank for International Settlements has additionally compiled Bank’s International Assets and Liabilities Statistics. Additionally, the IMF has compiled International Investment Position (IIP) statistics and established the Special Data Dissemination Standard (SDDS). In order to meet the requirements of international financial organizations, and with the intention of aligning external statistics more closely with the international standards, the Central Bank of China has compiled a broader range of external financial statistics such as external debt statistics, bank’s international assets and liabilities statistics, which both are annexed to the Balance of Payments Quarterly. In addition, the Bank has compiled international investment position statistics.
To provide readers with a better understanding of the balance of payments, this study is organized as follows. Firstly, it gives a brief introduction of the basic concepts, components and compilation methods of the balance of payments. Secondly, it describes the meaning of disequilibrium in the balance of payments, the ways of measuring the disequilibrium and the mechanism of adjustment to disequilibrium. Then, it addresses the impact of external transactions on macroeconomics and investigates the relationship between external transactions and national income. Finally, it describes new developments in international financial statistics.
Subjects
順差
金融帳
均衡
資本帳
經常帳
Current account
Balance of Payments (BOP)
equilibrilium
surplus
Capital account
Financial account
International investment position (IIP)
Type
thesis
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